Card check may have been dropped from the so-called Employee Free Choice Act, but binding arbitration still lingers and it’s just as devastating as the effective elimination of the secret ballot. Binding arbitration would allow a federal bureaucrat to dictate the terms of how a company should be run if the employer and a union cannot reach first contract.

Business and labor are squaring off on this key provision in EFCA, leading some like Sen. Jim DeMint of South Carolina to speculate whether binding arbitration was labor’s end-game all along:

“We suspected from the beginning that the binding arbitration was packaged with the elimination of the secret ballot in order to create a straw man they could take down later,” said Sen. Jim DeMint, R-S.C.

The unions argue that there’s nothing wrong with binding arbitration since companies use arbitration to settle disputes. But there’s a difference between attempting to resolve a  specific dispute and having a bureaucrat decide the terms of a contract that would last for two years:

Business groups say arbitration would allow a federal official who knows nothing about a company to suddenly dictate workplace rules including salaries, benefits and vacations.

They also say there is a big difference between settling one dispute via arbitration, and settling an entire contract that way.

“Card check is the political poison in the bill, but forced arbitration is the real poison,” said Steven Law, general counsel of the U.S. Chamber of Commerce.

As I have discussed, perhaps one of the reasons why unions favor binding arbitration and desperately want EFCA to pass is to force employers to pay into the unions’ flailing pension funds:

“They are desperately trying to get more union members and more employers to help get them out of the red in their pension funds,” DeMint said. Mandatory arbitration could be used to force businesses to contribute to these funds.

Don’t be deceived – EFCA is still a no-go even if card check is no longer part of the equation. Binding arbitration is just as dangerous of a proposition. It is difficult to see the unions capitulating on this front, so expect to see them fighting to ensure this is included in any sort of “compromise” that emerges from the Senate.